Congress Finds Debt Limit Compromise Elusive, As Deadline Looms

The House and Senate will convene Saturday afternoon as they
continue negotiations to raise the debt ceiling. But with
just days to act before one or more of the major credit
ratings agencies downgrades U.S. debt, Democrats and Republicans
can't seem to work together.

The plan put forward by Speaker of the House John
Boehner to raise the borrowing limit and cut the
deficit passed the House Friday, only to quickly fail in the
Democrat-controlled Senate.

Boehner had called an earlier proposal Republicans' final offer
on Thursday, before being forced to make it more unpalatable to
Democrats to gain GOP votes in the House.

The revised Boehner plan raises the debt limit in two stages and
$917 billion in cuts now, and introduces a requirement that
Congress cut an additional $1.6 trillion from the deficit pass a
balanced budget amendment to the Constitution before the second
increase is authorized. It's a bill the Senate will vote down,
and President Barack Obama has said he will veto.

In the Senate, Majority Leader Harry Reid filed a cloture motion
on his rival proposal, setting the stage for a key 1 a.m. vote on
Sunday to end debate on the measure. If it doesn't pass, then
Senate Republicans can hold the floor as long as they want,
making it exceedingly difficult to meet the August 2nd deadline.

It usually takes the Senate around six days to act on even the
most routine legislation, former Reid aide and Democratic
consultant Jim Manley said Friday, though with certain procedural
tricks there is still hope the Majority Leader can get a deal
through by Tuesday.

The current Reid plan cuts between $2.2 trillion and $2.4
trillion from the deficit, including about $1 trillion in
savings
from the wars in Iraq and Afghanistan — which has been called a
gimmick by Republicans.

His plan also calls for steep spending cuts as part of a
bipartisan deficit reduction committee next year, but he doesn't
make raising the debt limit contingent on the results

Reid has repeatedly modified his plan to court Republican votes,
including adopting the backward technique proposed by Senate
Minority Leader Mitch McConnell, which would delegate the
authority to raise the debt limit to Obama — as long as Congress
doesn't disapprove by a two-thirds margin.

In the meantime the House is expected to vote down the Reid plan
Saturday afternoon, as a sign it still stands by the Boehner
plan, but that may not last. House Rules Committee Chairman
David Dreier (R-CA) seemed to
think the House would have to act on another plan.

"We are going to have to come to some kind of agreement [with
Senate Democrats and President Obama]," he said Friday.

Even tea-party Sen. Rand Paul (R-KY), a supporter of neither
plan, could see that ultimate solution to raising debt limit
includes a compromise, telling Fox News Thursday that it is "some
amalgamation" of the original Boehner Reid plans.

If Reid does not believe his current proposal can reach the
60-vote threshold in the early morning vote, or that
modifications are needed to get the bill passed the House, he has
just one more opportunity to push a compromise plan through the
Senate.

Reid would have until 11:59 p.m. tonight to file cloture on a
modification of the Boehner bill, which would allow the Senate to
hold a final vote on the legislation on Tuesday at earliest,
sending it to the House for a high-stakes vote with hours until
the government must prioritize payments.

It's far from certain that Congress can raise the debt limit
before the August 2nd deadline, but if a compromise does not form
today it will likely be too late.